Macau casino operator Galaxy Entertainment Group will join forces with its associate in Monaco, Societe des Bains de Mer (SBM), to pursue casino resort development opportunities in Japan and other new Asia-Pacific markets.
Japan’s sudden move in December to legalise casino gaming has elicited renewed affirmations of interest from U.S. and Asian gambling bosses. Some have talked of investing up to US$10bn to open a casino resort in the country. Lawrence Ho, chairman and chief executive of Melco International Development, has called the opportunity “priceless” and said he would “spend whatever it takes to win.”
For Galaxy, according to President Michael Mecca, the passage of the bill made it “a suitable time to share details of our partnership” with Societe des Bains de Mer. In 2015, Galaxy paid €42.4 million (US$46.1 million) for a 5% stake in Euronext-listed SBM, a 154-year-old company which owns the stately Casino de Monte Carlo and three other gambling palaces in Monaco.
Prime Minister Shinzo Abe and other Japanese officials have signaled an interest in following the example of Singapore’s “integrated resorts” whose operators are required to invest heavily in non-gambling attractions to accompany their gaming offerings.
Mecca, in an interview with Nikkei Asian Review ahead of the company’s announcement of its development partnership with SBM on Wednesday, called Casino de Monte Carlo the “original integrated resort.” For the first three quarters of its current financial year, SBM generated just 40.1% of its revenue from gambling, with casino operations overshadowed by the company’s four luxury hotels, including the venerable Hotel de Paris.
Ruler Prince Albert II, who controls SBM through the government’s majority stake in the company, “was very involved” in choosing Galaxy as a partner, said Mecca, who now sits on the SBM board.
By contrast with SBM, Galaxy generated 89.6% of its revenue last year from gambling though its Macau properties include numerous luxury hotel towers, a theatre, an artificial beach and other entertainment offerings.
Mecca noted that Galaxy now has set up an office in Tokyo. “We have been building relationships with government officials, prefectural governments, city governments and major corporations,” he said. “We have been taking the time to understand how to do business in Japan.” Chairman Lui Che-woo had told reporters in Hong Kong in late February that the company was looking to enlist local Japanese partners. Galaxy’s flagship resort in Macau includes a hotel managed by Japan’s Okura Hotels and Resorts.